Negotiable Instruments Act, 1881
MCQ (181-200)
Q181. Under Section 138, who bears the burden of proving the absence of a legally enforceable debt or liability?
a) The complainant
b) The accused
c) The banker
d) The drawee
Q182. Which section allows a payee to recover interest in the event of a dishonour of a negotiable instrument?
a) Section 78
b) Section 79
c) Section 80
d) Section 82
Q183. A cheque marked as “Account Payee” can be:
a) Cashed over the counter
b) Endorsed further
c) Paid only to the payee’s account
d) Converted into a bearer cheque
Q184. Which section of the Negotiable Instruments Act mandates the issuance of a statutory notice for cheque dishonour?
a) Section 137
b) Section 138
c) Section 139
d) Section 142
Q185. Which Supreme Court case clarified that the prosecution under Section 138 is maintainable even if the cheque is dishonoured for reasons other than insufficient funds?
a) Modi Cements Ltd. v. Kuchil Kumar Nandi
b) Rangappa v. Sri Mohan
c) Laxmi Dyechem v. State of Gujarat
d) Kusum Ingots v. Pennar Peterson Securities
Q186. Under Section 118, which of the following presumptions is valid?
a) Consideration was given for the instrument
b) The instrument was issued post-dated
c) The instrument was issued with conditions
d) The drawee accepted the cheque without liability
Q187. Under Section 139, what is presumed unless the contrary is proved?
a) The cheque was issued for a lawful purpose
b) The cheque was not signed by the drawer
c) There was a lack of sufficient funds
d) The payee forged the instrument
Q188. Which of the following is NOT a negotiable instrument under the Act?
a) Promissory note
b) Cheque
c) Bill of exchange
d) Fixed deposit receipt
Q189. What does Section 138 aim to curb?
a) Fraudulent bank transactions
b) Failure to pay legally enforceable debts via cheque
c) Unregulated issuance of promissory notes
d) Negotiability of instruments
Q190. What is the limitation period for filing a complaint under Section 142?
a) 15 days from receipt of notice
b) 30 days from the expiry of notice period
c) 60 days from the dishonour of cheque
d) 90 days from issuance of cheque
Q191. Which section provides that a holder in due course gets a better title than the transferor?
a) Section 8
b) Section 9
c) Section 10
d) Section 11
Q192. Can a cheque dishonoured due to an incomplete signature of the drawer attract liability under Section 138?
a) Yes
b) No
c) Only if proven fraudulent
d) Depends on court’s discretion
Q193. What is the effect of material alteration on a negotiable instrument?
a) It becomes void
b) It remains valid
c) The payee is liable
d) The drawee can enforce it
Q194. Who is protected under Section 131 when a cheque is dishonoured due to insufficient funds?
a) The drawer
b) The collecting banker
c) The payee
d) The indorser
Q195. What is required for an indorsement to be valid?
a) It must be written on a separate paper
b) It must be written on the instrument itself
c) It must be done by the drawee
d) It must include the drawee’s signature
Q196. Under which section is a cheque defined?
a) Section 4
b) Section 5
c) Section 6
d) Section 7
Q197. Which section defines a promissory note?
a) Section 3
b) Section 4
c) Section 5
d) Section 6
Q198. Who is liable if a cheque is dishonoured due to a forged signature?
a) The drawer
b) The drawee bank
c) The payee
d) None of the above
Q199. Which case established that a cheque issued as a gift does not attract liability under Section 138?
a) Laxmi Dyechem v. State of Gujarat
b) Modi Cements Ltd. v. Kuchil Kumar Nandi
c) Vijayan v. Baby
d) Kusum Ingots v. Pennar Peterson Securities
Q200. Under which section does the term “dishonour” due to insufficiency of funds fall?
a) Section 138
b) Section 139
c) Section 140
d) Section 141